Utilising Waste

MNRE gives a fresh impetus to the WtE segment

The total installed capacity of bioenergy in India stood at 9.8 GW as of July 2018. Of this, biomass and cogeneration projects contribute 9.5 GW and waste-to-energy (WtE) contributes the rest. In the past seven months, only 14 MW of bioenergy projects have been set up in the country as against the targeted 370 MW capacity for 2018-19. Even more disappointing is the fact that not even one grid-interactive or off-grid WtE plant has been set up since the beginning of this financial year.

Various factors have contributed to these low capacity additions in the bioenergy segment. The bioenergy segment has long suffered from neglect due to preference being given to the solar and wind segments. The advent of competitive bidding for both solar and wind, and the discovery of low tariffs have almost put a stop to the utilisation of this renewable resource. Moreover, the challenges posed by the collection, storage and transportation of biomass and waste have also kept developers and investors at bay. Due to the government’s greater focus on the solar and wind segments, no major policy initiatives were seen in the bioenergy segment.

However, the recent policy announcements from the Ministry of New and Renewable Energy (MNRE) might help to address some of these challenges. In May 2018, the MNRE’s biomass power division announced a programme to support the promotion of biomass-based cogeneration in sugar mills and other industries. In the same month, the National Policy on Biofuels, 2018 was also announced by the government. To encourage the uptake of WtE projects, the MNRE in July 2018 approved the continuation of a dedicated WtE programme. The programme, Energy from Urban, Industrial and Agricultural Waste/ Residue, has been approved with modified terms and conditions from 2017-18 to 2019-20.

WtE programme objectives

The main aim of the programme is to create a conducive policy and financial environment for the development and demonstration of energy recovery through waste utilisation. The programme will promote the installation of energy recovery projects from urban, industrial and agricultural waste to generate power and biogas, bio-CNG, enriched biogas, as well as promote the utilisation of waste for thermal use through gasification in industries.

The programme will also promote biomass gasifier-based power plants to cater to the unmet energy demand of industrial captive power and thermal demands of rice mills and other similar industries. In addition, the plants will provide electricity in rural areas for lighting, water pumping and running micro enterprises.

Scope and incentives

Under the WtE programme, central financial assistance (CFA) will be given for setting up waste-based biogas or bio-CNG production plants, power generation plants and biomass gasifiers. These incentives will be in the form of capital subsidy and grants-in-aid. They will also be provided for activities that promote waste utilisation for energy recovery like research and development, resource assessment, technology upgradation and performance evaluation.

A total CFA of Rs 780 million with a physical target of 57 MWeq has been assigned for projects that are set up under the programme between 2017-18 and 2019-20. The eligibility criteria for availing of these incentives are based on the type of waste and technology being used. Interestingly, there is no maximum or minimum project capacity defined under the eligibility criteria for this programme, except for cattle dung-based power projects. Separate guidelines will be issued for power projects utilising municipal solid waste.

Different applications of waste utilisation have different CFA brackets under the programme. The amount of capital subsidy that can be disbursed will be capped to a maximum of Rs 100 million per project, and it will be calculated on the basis of installed project capacity. The state nodal agencies will be provided an incentive/service charge at the rate of 1 per cent of the eligible CFA (maximum incentive of Rs 500,000 per project) to facilitate project development and monitoring during implementation and post-commissioning.

Outlook

With the increasing population and the related growth in agricultural and industrial activities, waste will continue to be generated. WtE provides a sustainable way of meeting the country’s energy demand as well as disposing of waste. The WtE programme is an important step in addressing the policy challenges in this segment and generating confidence amongst developers and investors. The programme is also in line with the country’s overall goals of import reduction, employment generation and skill development.